Home Bias Among Institutional Investors: A Study of the Economist Quarterly Portfolio Poll

56 Pages Posted: 5 Apr 2001

See all articles by Jungwon Suh

Jungwon Suh

SK Economic Research Institute

Abstract

This paper studies the equity home bias puzzle by examining international portfolios recommended by institutional investors. These recommended portfolios from the Economist quarterly poll allow us to isolate the role of information asymmetry in international portfolio investments. The results show that the recommended portfolios exhibit home bias both in the level of portfolio holdings and in the frequency of portfolio adjustments. Specifically, institutions' recommendations are tilted towards home markets relative to benchmark portfolios. In addition, institutions tend to change home market weights more frequently than foreign market weights or than institutions from other countries do. The evidence in this study is consistent with the information story of home bias.

Keywords: Home bias, information asymmetry, international portfolio choices

JEL Classification: G14, G15, G20

Suggested Citation

Suh, Jungwon, Home Bias Among Institutional Investors: A Study of the Economist Quarterly Portfolio Poll. Available at SSRN: https://ssrn.com/abstract=261124 or http://dx.doi.org/10.2139/ssrn.261124

Jungwon Suh (Contact Author)

SK Economic Research Institute ( email )

23-10, Yeouido-dong, Youngdungpo-gu
150-734 Seoul
Korea
+82-2-3773-8918 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
524
Abstract Views
2,271
Rank
81,377
PlumX Metrics